Cost-volume-profit analysis is a precise tool for perfectly predicting the profit consequences of cost changes, price changes, and volume changes.

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Quizplus · Accepted Answer

Cost-volume-profit analysis is a useful tool for understanding the general effect of cost, price, and volume changes on profits, but it is not precise due to its reliance on assumptions and simplifications, such as constant costs and prices, which may not hold true in real-world scenarios.

Cost-Volume-Profit Analysis Is a Precise Tool for Perfectly Predicting the Profit